COMPANIES EMBRACE NEW NORM THAT SPLITS CMD POSTS
More than two-thirds of
India’s top publicly-traded companies have separated the positions of chairman
and managing director (CMD), although the deadline to comply with the rules is
more than 13 months away. That leaves just 156 of the BSE 500 companies to
still untangle the role of CMD as of 15 February, compared with 291 in July last
year, according to Prime Database, a primary market research tracking firm. The
idea behind the separation of the two positions is to bolster corporate
governance. The separation of powers, according to some experts, increases the
effectiveness of the board’s oversight role A third of the companies that have
not complied with the rule so far are public sector enterprises or state-run
banks. Although companies still have time to meet the April 2020 deadline, most
firms, save for some family-run and government-controlled firms, have started
the process of splitting the two positions. India’s most valuable company
Reliance Industries Ltd, the country’s third and fourth largest information
technology services firms, HCL Technologies Ltd and Wipro Ltd, respectively,
and JSW Steel Ltd are among the companies that need to comply with the new
rules The four, along with 90 of India’s largest publicly traded companies,
have members of the promoter group holding both the chairman and MD titles.
Promoters still appear to be looking at how else they can retain maximum power
over their firms and so a perceived reluctance on their part to split the
titles, said the head of a proxy advisory firm, on condition of anonymity. But
most companies have initiated efforts to comply with the rules. One of the most
recent examples is Persistent Systems Ltd, a software services company based in
Pune. Chairman and MD Anand Deshpande last week decided to relinquish his role
as MD. Christopher O’Connor will take over as chief executive on 26 February.
The transition will take at least six months. So we decided to start the
process a year in advance, said Deshpande. At Persistent, Deshpande will
transfer his CEO responsibilities to O’Connor, who joins the company on 25
February, over the next three quarters. Persistent, Yes Bank Ltd and Tata
Coffee Ltd are some of the 135 companies that have, over the past seven months,
separated the CMD role. This was after the Securities and Exchange Board of
India approved many of the recommendations made by a 25-member panel led by
Uday Kotak, chief executive of Kotak Mahindra Bank. One of these
recommendations was the contentious issue of a company splitting the role of
CMD. More companies of the remaining 156 in the list could split the CMD roles
during the annual general meetings later this year. I expect that during the
July-August period when most companies hold their AGMs (annual general
meetings), more companies will put this proposal of splitting the role of
chairman and managing director before their shareholders, said Shriram
Subramanian.
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HOME BUYERS SEEK PARTICIPATION IN BUILDER'S BANKRUPTCY
A group of home buyers of
Navi Mumbai-based Monarch Developers have filed an intervention application
against the builder at the National Company Law Tribunal, which is hearing an
insolvency petition against the builder. As many as 1,500 under-construction
flats have been sold by the developers spread across Navi Mumbai. These people,
who see little hope of getting possession of their flats, have filed an
application at the court seeking participation in the case. We are representing
certain home buyers and have filed an intervention application in NCLT for
intervening in the company petition filed by Capri Global under the Insolvency
and Bankruptcy Code, to protect their interests in this matter, said Vinay
Chauhan. Home buyers have prayed that the court direct the interim resolution
professional (IRP) to ensure that the interest of the home buyers are not
compromised, if the court admits the case. They have sought a court order
directing financial creditors to amend/rectify the application in case there is
a disclosure in the application, stating that the flats belonging to the
applicants are part of security obtained by it from the corporate debtor. Flat
buyers have also prayed the court to instruct the IRP to judiciously and
scrupulously scrutinise all the claims made by the financial creditor.
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NCLAT: CASE PENDING UNDER NEGOTIABLE INSTRUMENTS ACT NOT A
DISPUTE
The National Company Law
Appellate Tribunal (NCLAT) recently held that if a case is pending under
section 138/141 of the Negotiable Instruments Act, 1881 (NIA), it cannot be held
to be a dispute pending before a court of law The pending case amounts to
admission of debt and not the existence of a dispute. In Sudhi Sachdev v APPL
Industries Ltd, NCLAT was considering an appeal against an order passed by the
National Company Law Tribunal (NCLT), New Delhi bench. NCLT had allowed the
application filed by APPL Industries (the operational creditor) under section 9
of Insolvency & Bankruptcy Code, 2016 (IBC), and also passed an order of
moratorium. On appeal, Sudhi argued that a dispute already existed because APPL
had already instituted a case under section 138/141 of NIA, which was pending
in Gurgaon. A proceeding under section 138 is a civil case for recovery of
money, therefore, in view of the pending outcome of the case, an application
under section 9 of IBC could not be sustained NCLAT, however, did not agree
with the contention and held that under section 8 of IBC, the corporate debtor
is to bring to the notice of the operational creditor the existence of a
dispute or the record of a pending suit or arbitration proceedings, which is
preexisting i.e., before such notice or invoice was received by the corporate
debtor within a period of 10 days of receipt of the demand notice or a copy of
the invoice mentioned in sub-section (1). If there is existence of such a
dispute, the operational creditor does not fall within the realm of the IBC.
NCLAT held that in the present case, it was not in dispute that there was a
debt payable to the operational creditor and default on the part of the corporate
debtor.
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NEED TO STRENGTHEN CORPORATE INSOLVENCY RESOLUTION PROCESS:
ICRA
There is a need to
strengthen the insolvency resolution process by having deterrents against
failure or delays in implementing resolutions plans, a report said Monday. In
the last two years, Insolvency and Bankruptcy Code (IBC) was implemented, three
concluded corporate insolvency resolution process (CIRPs) being brought back to
the National Company Law Tribunals (NCLTs), it said. The need of the hour is to
strengthen the (resolution) mechanism to ensure that the resolution plans
approved by the National Company Law Tribunal (NCLT) are firmly implemented so
that the sanctity of the process is maintained The three cases which came back
to NCLTs went into liquidation, domestic rating agency ICRA said. The
government should set up strong deterrents to ensure that the resolution
applicants do not default on their proposed plans, through measures like a
penalty amount linked to the realization promised to the creditors under the
resolution plan or barring the resolution applicant from participating in any
future CIRPs, it said. The deterrents would make resolution applicants more
cautious and sincere, and reduce instances of completed CIRPs being brought
back to the NCLT benches which are already over-burdened with cases, it said.
It also cited the case of Amtek Auto, where the company was deemed to have
completed its CIRP with the recovery of Rs 4,330 crore to financial creditors,
but the resolution plan got approved one full year after admission to NCLT. The
agency said 600 cases have been closed under the IBC by various NCLT benches
but only 82 CIRPs yielded a resolution plan. The completion of a CIRP with
acceptance of a resolution plan approved by the Committee of Creditors has
turned out to be a time-consuming affair with certain corporate debtors
requiring even more than 500 days to close the CIRP, Dafria said.
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JAYPEE INFRATECH LENDERS DISCUSS BIDS BY NBCC AND SURAKSHA
ASSET RECONSTRUCTION COMPANY
Lenders of Jaypee
Infratech met on February 18 to discuss the resolution plans submitted by two
shortlisted bidders - state-owned NBCC and construction company Suraksha Asset
Reconstruction Company - to take over the realty firm and complete stalled
projects some of which have been delayed by over a decade. The Committee of
Creditors (CoC) has recommended that a forensic audit of the company's accounts
be conducted as per the demand of homebuyers, sources told. Both bids were
presented to COC and negotiations are likely to commence soon. One of them will
eventually be shortlisted and would be put to vote by March-end. The COC also
agreed to put to vote homebuyers' request for a forensic audit. It would be put
to vote next week between Wednesday (February 27) and Saturday (March 2), the
source said. At the meeting, interim resolution professional Anuj Jain provided
a status update on the resolution process. A request from authorised
representatives of the homebuyers for conducting a fresh forensic audit was
also heard. Homebuyers were represented by Kuldip Verma. According to sources,
NBCC has offered Rs 1,000 crore upfront to lenders and Rs 2,150 crore to
homebuyers. It has offered Rs 3,000 crore in land deals to lenders, and said
that the projects would be completed in four years.
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ANIL AMBANI GROUP FIRMS SURGE AFTER AGREEMENT WITH LENDERS ON
PLEDGED SHARES
Anil Ambani-controlled
Reliance Communications Ltd, Reliance Power and Reliance Infrastructure Ltd,
Reliance Capital Ltd and Reliance Naval and Engineering Ltd on Monday surged
intraday over 17.64%, 14.71%, 11.88%, 11.51% and 9.94%, respectively, after
ADAG firms reached an agreement with more than 90% of lenders under which they
won’t sell any shares pledged by promoters until September Under the pact, the
group will pay the principal and interest amounts to the lenders as per the
scheduled due dates, while it has also appointed investment bankers for part
placement of the group's direct 30% stake in Reliance Power to institutional
investors, Reliance Group said. The investment bankers will begin road shows
for the share placement, they added. Some of the key lenders include Templeton
MF, DHFL Pramerica MF, Indiabulls MF, IndusInd Bank and Yes Bank. While the
group's loan exposure to L&T Finance is nil now, it is about ₹150
crore in case of Edelweiss, against which Reliance Power has also complained to
capital markets regulator Sebi and has filed a case in the Bombay High Court as
well.
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INFOSYS SETTLES CASE WITH SEBI, PAYS RS 34 LAKH
IT major Infosys has
settled with Sebi a case of alleged disclosure lapses regarding severance
payment made to its former chief financial officer Rajiv Bansal. The company
paid Rs 34.35 lakh to settle the case with the markets regulator, according to
an order. The watchdog had issued a notice seeking to initiate adjudication
proceedings against the company in November 2017. The notice related to Sebi
examining the scrip of Infosys during which the issues pertaining to severance payment
to Bansal was also looked into. Bansal resigned from the company on October 11,
2015, according to the order. During the examination, prima facie, it was found
that the severance payment was made without prior approval of audit committee
as well as nomination and remuneration committee. These were violations of
various listing norms. In December 2017, Infosys filed an application under the
settlement mechanism. The company in its meeting with the regulator's internal
committee in February 2018 proposed to pay Rs 34.35 lakh towards settlement
charges. The amount was approved by the panel of whole-time members of Sebi,
the regulator said in an order dated February 15.
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FTIL TENDERS APOLOGY FOR TAKING ₹31 CR FROM NSEL
Financial Technologies
(India) Limited (FTIL), which is now known as 63 moons, has tendered an
unconditional apology for receiving ₹31 crore as part of a
business settlement in 2013 from its embattled subsidiary, National Spot
Exchange Limited (NSEL). The case relates to an illegal transfer of fund by
NSEL to FTIL, despite a Bombay High Court order that restrained the former from
selling or transferring any of its assets after it failed to settle trade worth
₹5,600 crore on its platform. Last November, the Bombay High
Court issued a show-cause notice to FTIL for contempt of court. The court will
consider FTIL’s apology, along with a separate affidavit, to be filed by NSEL
on February 22. The money transferred to FTIL was part of a procurement, which
was never under any dispute, said NSEL in its affidavit filed late last month.
FTIL said that NSEL had sourced cotton for National Agricultural Cooperative
Marketing Federation of India by using working capital raised from HDFC Bank
through a corporate guarantee agreement of ₹31 crore signed by FTIL. After
the settlement crisis in NSEL, HDFC Bank had invoked the corporate guarantee of
FTIL. Subsequently, NSEL had received ₹65 crore from Nafed for
fulfilling the cotton procurement contract and transferred ₹31
crore due to FTIL in 2013. However, by way of abundant caution and due
deliberations, FTIL had returned ₹31 crore to NSEL on
January 25, 2019. If the court comes to the conclusion that orders have been
breached, FTIL said the breach as alleged was ‘inadvertent’ and ‘unintentional’
Further, it said it had tendered an unconditional and unqualified apology for
breach of orders passed by the court and pleaded discharge of the show-cause
notices.
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MALVINDER: FOR SPIRITUAL SEAT, SHIVINDER ALLOWED DHILLON TO
SIPHON OFF ₹8,646 CRORE
After years of speculation
that Gurinder Singh Dhillon, head of Radha Soami Satsang Beas (RSSB), a North
India-based spiritual commune, received thousands of crores from the Singh
brothers of Ranbaxy, Malvinder Singh has now detailed how money allegedly
flowed from his companies to the ‘spiritual leader.’ In a complaint this month
to the Economic Offences Wing (EoW) of the Delhi police, Malvinder accused his
younger brother, Shivinder, the Dhillon family and the former head of Religare
Enterprises, Sunil Godhwani, of criminal conspiracy, cheating and fraud for
allegedly siphoning off thousands of crores from RHC Holdings, the group’s
holding company that once promoted Fortis Hospitals and Religare. Loans
extended to the Dhillon family reached ₹5,481 crore and Malvinder
was repeatedly threatened whenever he tried any recovery. The complaint has
various ledger details, bank account statements and email correspondence
between the associates of Dhillon, Shivinder and Malvinder. It claims that
apart from loan termed as ‘Part 1’, the total outstanding from Dhillon as on
March 2016 stood at ₹8,646.47 crore. ‘Part 2’
included investments held for Dhillon and losses proportionate to his
shareholding parked with (Singh brothers) for business reasons. Shivinder
initiated these actions and permitted siphoning and malfeasance of funds with
the ulterior motive of gaining control of the seat of the spiritual head of
RSSB, which was promised to him by Dhillon in lieu of the financial gains, the
complaint states. According to Malvinder, the genesis of the fraud can be
traced to Godwani’s induction into Fortis Finance (now Religare) in 2001 and
later RHC (which he managed), both at the behest of Dhillon. Being a member of
Fortis Healthcare and SRL boards, Godhwani was also a key decision maker in the
financial affairs of these companies and controlled the subsidiaries of RHC.
After their father’s death, the Singh brothers considered Dhillon as a ‘guide.’
The complaint says Shivinder acquired six companies belonging to Dhillon and
his associate Rajveer Singh Gulia to absorb the loans into the books of RHC.
Also, Shivinder unilaterally signed a purported family settlement with Dhillon
to absolve him of any wrongdoing and Malvinder was threatened to do the same.
Malvinder has said in his correspondence he was shocked to know that companies
acquired by RCH were not going concerns by 2017-18. How can this happen so
quickly? he wondered. Malvinder states that Dhillon wrote to him seeking
discharge from the liabilities.
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FORTIS FRAUD MAY EXCEED ₹2,000 CRORE, SAYS SFIO
The alleged funds
diversion at Fortis Healthcare Ltd could add up to more than ₹2,000
crore according to the trail of funds uncovered by the Serious Fraud
Investigation Office (SFIO), a government official said. The Securities and Exchange
Board of India (Sebi), too, suspects that the total size of the Fortis fraud
could be much higher than the ₹403 crore it originally estimated, a second person familiar
with the development said, requesting anonymity. Sebi has already passed an order
against Fortis to recover ₹500 crore from the Singh brothers for funds diverted to the
promoter and promoter-related entities in December. Some of these facts also
emerged from the complaint filed by Malvinder Singh with the Economic Offences
Wing in Delhi and findings by SFIO. These depict a dark picture of a series of
transactions between RHC Holding Pvt. Ltd, the holding company promoted by
brothers Malvinder and Shivinder Singh, wherein RHC extended loans worth ₹5,482
crore to Dhillon family members, their associates or entities controlled by
them. This is independent of the ₹1,006.3 crore allegedly
provided by Fortis and Religare Enterprises Ltd, another company controlled by
the Singh brothers, to the six promoter-related entities. The funds belonged to
shareholders of Fortis and Religare, among others. This came to notice during
an assessment, as Malvinder Singh claimed in his complaint, conducted after an
audit found these companies under heavy debt. Malvinder Singh claimed his
brother Shivinder connived with Dhillon to sell these firms to RHC, thus
putting more strain on the holding company. Malvinder Singh added that the
companies were acquired without any legal due diligence execution of agreements
and any check on their businesses. The twist in the tale came when Dhillon
sought to discharge himself from the said liabilities, asking the Singh
brothers to sign a family settlement that would encompass no legal proceedings
or criminality in any circumstance against him. According to the proposed settlement,
Shivinder Singh was offered a position to head the Radha Soami Satsang Beas
sect—one that Dhillon would abdicate. In return, the Singh brothers were to
write off these loans as bad debt.
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GAURS' LAST BID FOR JAYPEE INFRA
The Gaurs, the promoters
of Jaypee Infratech, on Monday made a last-ditch effort to regain control of
the debt-laden company that is facing insolvency by offering to settle the dues
to lenders led by IDBI Bank. Jaypee Infratech, with debt of close to Rs 10,000
crore, had been referred for insolvency action in August 2018 and the lenders
had earlier rejected the promoters' bid to acquire the company under the
resolution process. The offer was spurned as section 29A of the Insolvency and
Bankruptcy Code (IBC) explicitly bars the promoters from being considered for
the resolution process. This time, the Gaurs have suggested that they will
settle the dues of lenders under section 12A of IBC, banking sources said. The
sources said that Manoj Gaur made a presentation before the committee of
creditors on Monday. While the committee comprising bankers and home buyers
heard out Gaur, it is unlikely to consider the offer as NBCC and Suraksha Asset
Reconstruction Company have moved ahead with the financial bids that have
already been opened, a banker said. The Ruias of Essar Steel had recently made
a similar offer even though lenders had backed ArcelorMittal's bid for the
company. The offer had been rejected by the banks, which cited a court ruling
to back their argument.
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RISE IN PLEDGED SHARES BY PROMOTERS PUTS DALAL STREET ON THE
EDGE
Promoters of India Inc
continue to rely heavily on share pledging to raise debt for funding their core
and non-core business activities. According to the data analysed from
Capitaline, the promoters pledged more than Rs 1.2 trillion worth of shares in
2018-19, 60 per cent higher than the previous year’s tally. So far in 2019,
more than Rs 16,000 crore worth of shares has been pledged by the promoters.
The data analysis takes into account the value of shares reported by the listed
companies to the exchange as part of their pledge creation disclosures.
Industry observers say structured deals, involving loans against shares (LAS),
have led to a spurt in share pledging. Domestic mutual funds (MFs) are active
participants in such deals with their exposure ranging between Rs 25,000 crore
and Rs 30,000 crore. Sources say such deals have come under the scanner of the
Securities and Exchange Board of India (Sebi), which is engaging market players
to assess the wider risks for the market. The rise in the value of pledged
shares could also be due to the margin calls getting triggered as the heavily-pledged
companies have seen sharp sell-off. Most of the leveraged companies have seen
sharp erosion in their share prices. Also, the promoter pledging is quite high
in the mid- and small-cap stocks. These stocks have corrected 30-50 per cent in
the last few months, which must have triggered margin calls, said G
Chokkalingam. The data shows that promoters of mid- and small-cap companies’
have pledged more than Rs 77,000 crore worth of shares in FY19, which accounted
for 62 per cent of the total value of the promoter shares that got pledged in
the same period. The rise in promoter pledging not only poses higher risks for
lenders and borrowers, but also puts the minority shareholders at a
disadvantage, say experts. The rise in promoter pledging shows how the lines
between promoters’ personal wealth and shareholders’ wealth in promoters’
listed companies is blurring. This is a worrying trend from the standpoint of
governance standards within corporate India, said Amit Tandon. With markets
expected to remain volatile, promoters and lenders exposed to the industrials
and materials space can face brunt of the price erosion of the pledged shares.
According to an Edelweiss note, promoter pledges in industrial and material
space are highest at Rs 48,100 crore and Rs 38,700 crore, respectively.
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RBI BOND PURCHASES POINT TO A LIGHTER INTERVENTION IN INDIA'S
FOREX MARKET
While the Reserve Bank of
India’s (RBI’s) forex interventions are primarily done to manage the currency,
they lead to big swings in the banking system’s liquidity. Dollar purchases by
the central bank infuse rupee liquidity into the system and vice versa. Of
course, the two tools are used depending on whether currency management or
liquidity management is topmost on the agenda. Even so, activity in one of them
has a bearing on the other. Ergo, the planned quantum of bond purchases by RBI
in February indicates that the central bank did not have much work in the forex
market in the past two months. RBI has committed to buy ₹37,500
crore worth of bonds this month. While that is lower than the ₹50,000
crore it had bought in the previous three months, open market operations (OMOs)
remain high.
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RBI RAP ON YES BANK ON NPAS CONFUSES BANKERS
Bankers are flummoxed by
RBI’s warning to YES Bank for making public its zero divergence in NPAs in the
fiscal 2018. The RBI’s harsh view of YES Bank’s move has confused lenders on
whether it is a good practice to disclose NPA divergence, even though
regulatory guidelines make it compulsory to disclose it in their notes to
accounts. The RBI’s reprimand to YES Bank is strange because banks have been
making their NPA divergence numbers public. We are still trying to figure out
what it means for us because there has been very rarely such harsh public
communication by the central bank, said a top risk officer at a private sector
bank. The assessment of divergence is based on information shared with banks
followed by meetings of RBI officials with bank executives in the bank’s
premises. These meetings culminate with a supervisory meeting chaired by an RBI
executive director in the RBI to take the bank’s views before the final report
is prepared. RBI has not taken kindly to YES Bank’s off-results declaration NIL
divergence is not an achievement to be published and is only compliance with
the extant Income Recognition and Asset Classification norms. The RAR
identifies several other lapses and regulatory breaches in various areas of the
bank’s functioning and the disclosure of just one part of the RAR is viewed by
RBI as a deliberate attempt to mislead the public, RBI said. The banker cited
above said the RBI report highlights the governance, credit risk and operational
risks for a bank. This communication is confidential between the bank and RBI
It is possible that YES Bank has been pointed out lapses on that front which it
ignored. But it is true that divergences have been declared by other banks
recently, he said. A Jefferies analyst said RBI’s harsh view could be an
attempt by the RBI to defend its decision not to extend CEO Rana Kapoor’s term
by alluding to lapses, despite giving a clean chit on NPL divergence. But we do
not view its disclosure as out of line with peers. ‘Nil’ divergence is a major
positive and ticks an important box in terms of investment rationale, Jefferies
said.
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COC MAY HOLD MORE MEETS WITH TWO JAYPEE INFRATECH BIDDERS
The Committee of Creditors
(CoC) overseeing Jaypee Infratech’s insolvency resolution process is likely to
hold more meetings with two bidders before deciding, two people with direct
knowledge of the development said. In a meeting on Monday, the lenders
discussed the bids received from state-run construction company NBCC and
Suraksha Asset Reconstruction Company. Both bidders made separate presentations
to the CoC Lenders are likely to negotiate with both the bidders separately and
these meetings will be held over the next two to three weeks. Jaypee Group
promoter Manoj Gaur was also present in meeting, said one of the persons
mentioned above. Anuj Jain, the insolvency resolution professional (IRP), had
shortlisted four players — NBCC, Kotak Investment, Singapore-based Cube
Highways and the Suraksha Group — and asked them to submit their resolution
plans by February 15. According to the persons mentioned above, as part of its
proposal, NBCC has offered to hive off Taj Expressway and give it to lenders.
The value of the road project is over Rs 6,000 crore given the toll collection.
NBCC has asked lenders to provide Rs 2,000 crore in lieu of this project. Half
of this will be returned to lenders as part of repayment package and balance
will be used for completion of projects, estimated to cost Rs 1,500 crore. NBCC
has also offered to give 1,400 acres as debt-asset swap and is looking to build
homes in these stuck projects in four years. CoC had called for the
presentations from the bidders and we made our presentation today. Although I
cannot share details of our commercial proposal because of confidentiality, but
I can certainly say that we are confident of delivering the flats ahead of the
times frame we have proposed, Anoop Kumar Mittal, told. Suraksha ARC, as part
of its bid, offered debt asset swap to lenders in addition to an upfront
payment of around Rs 20 crore. Suraksha’s debt-asset swap plan does not include
the road projects and offers only land parcels.
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MERGER OF THREE GENERAL INSURERS LIKELY IN FY20
The proposed merger of the
three state-owned general insurance firms will happen only in the next fiscal
said two government officials aware of the developments. We will further bring
down the losses before setting up a combined entity said one of the officials.
The government had announced merger of National Insurance Company, United India
Insurance Company and Oriental India Insurance Company in the Budget 2018. The
government has now directed these firms to make their operations more efficient
and low cost while the companies are also looking at monetising their assets
including real estate to raise revenues, the official said. The other official
said the government is also looking at issues such as the need for a review of
the HR practices across the three firms. Right now there are no synergies, the
official said. Any merger will further impact the commercial interest of these
insurers. The government had plans to list the merged entity. In 2017-18, it
had listed National Insurance and General Insurance Company, divesting 11.65%
and 12.5% stakes, respectively, in the two companies.
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SBI DOES NOT HAVE ANY HEADROOM TO CUT DEPOSIT RATES: CHAIRMAN
RAJNISH KUMAR
State Bank of India, the
country's largest public sector lender, currently does not have any headroom to
cut deposit rates and thus cannot cut its base lending rate, Rajnish Kumar
told. The issue is that we need to cut the rate on the deposit if we need to
cut the MCLR, said Kumar, adding this is not possible as other banks are
currently offering significantly higher interest rates on deposits and these
would need to get slashed first in order for SBI to react.
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INDIAN REAL ESTATE CAN EVOLVE INTO TRILLION DOLLAR ECONOMY
Globally, real estate
development is an important parameter to measure economic growth If one just
looks at the demand for homes in India, the growth potential is huge. Initiatives
by the government, including ‘Housing for All by 2022’ offers major growth
potential not just for the sector, but also for economic development and GDP
growth. Indian real estate is the engine which will power the Indian economy
into the ‘big league’ From the ancillary industries that it supports to job
creation – easily the next in line after agriculture and manufacturing – Indian
real estate has the potential to reach the magic figure of ‘trillion dollars’.
A KPMG Report released at NAREDCO and APREA’s Real Estate & Infrastructure
Investors’ Summit in Mumbai last year stated that the Indian real estate will
be a $1 trillion industry by 2030 This will propel it to being the third
largest economy globally – and this growth will be driven by not just the huge
demand for homes, but also new and emerging asset classes within real estate,
such as affordable housing, co-working spaces, warehousing and logistics, among
others. The ‘grease’, which will ensure this happens easily, is the post-RERA
transparent regulatory environment powered by the economic and taxation
reforms. Estimates suggest that from $120 billion in 2017, the sector should
grow to $650 billion by 2025. During this period, its contribution to GDP is
estimated to go up from the present 7 per cent to 13 per cent. Even as the new
paradigm in post-RERA scenario ensures this does happen, we also need to factor
in ground realities that will play a major role. Creating jobs is another
aspect where real estate powers the economy, and will help achieve the
‘trillion dollar’ target. The third largest employer, it employs over 50
million at present. From being an unorganised sector traditionally, Indian real
estate has become more organised, transparent and now offers a safe and secure
environment – ideal for investment that drives growth.
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SUPREME COURT REFUSES TO STAY CCI MONSANTO PROBE
The Supreme Court on
Monday refused to stay a Competition Commission of India (CCI) investigation
into the alleged anticompetitive policies followed by Monsanto and the role
played by its officers and directors. A bench led by Justice SA Bobde, sitting
alongside Justice Deepak Gupta, rejected a plea by senior advocate Dhruv Mehta
against the Delhi High Court order of December 18, 2018. Mehta argued that
company officials and directors were being called to supply information even
before having been held guilty. But Justice Bobde wouldn’t hear of it. No
status quo, stay is required qua individuals, he said, as nothing is happening
(against them). Held guilty is far away. It may never happen. Don’t allow
yourself to feel the pressure, he said, when Mehta insisted. The bench,
however, issued notices on the petition and directed that it be tagged for
hearing with the company’s appeal pending in court against the probe. Senior
advocate Jayant Bhushan.
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HDFC BANK HAS NO PLANS TO CUT DOWN BRANCH EXPANSION TO FOCUS
ON TECH: CEO
Largest domestic lender
from the private sector space, HDFC Bank, does not intend to cut down on branch
expansion a top official said Monday. It can be noted many banks globally are
focusing on technology more than the physical presence in recent times. He said
the bank will give a choice to the customers, who can transact either through
mobile phone or a laptop or visit a branch.
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LARSEN & TOUBRO STOPS DISCLOSING ORDER SIZE AMID INTENSE
COMPETITION
Larsen & Toubro has
changed its practice of disclosing order details to keep competitors from
gauging its pricing strategy — a development that is a statement to the
intensity of competition in the sector. L&T, the bellwether for the
construction and engineering sector in India, is closely tracked by
shareholders, analysts and competitors and is often seen as a proxy for India’s
infrastructure growth story. But with competition heating up at a time when the
total order pie has already shrunk, the industry leader has taken a break from
its tradition of giving details of order wins, and is instead only giving a
broad range of the order size. L&T said, L&T has revised its new order
disclosure format to protect its competitive interests. We will continue to
guide our stakeholders by providing order value range. For years, L&T has
been periodically announcing its orders. In most cases, it gives details of the
customer and the exact financial consideration for the job won, unless there is
a confidentiality agreement or the job is sensitive in nature. The company has
now decided to only give a price range. L&T reported a decline in order
inflows in the third quarter of 2018-19, and its management had then said that
domestic orders have slowed down. But the company had left it order inflow
growth guidance of 10-12% for the fiscal year unchanged.
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ARCELORMITTAL OFFERS RS 4,800 CRORE FOR ESSAR MAHAN UNDER OTS:
POWER FINANCE CORPORATION
Steel giant ArcelorMittal has
proposed a resolution offer of Rs 4,800 crore to lender of stressed Essar Mahan
power project, over 37 percent higher than offered by the promoter Essar Group.
Essar Group has made a resolution offer of Rs 3,500 crore under one time
settlement (OTS) scheme for Essar Mahan, which is a 2x600 MW coal based power
plant situated in Madhya Pradesh. Besides PFC, other lenders to Essar Mahan are
ICICI Bank, which is the lead bank, Punjab National Bank (PNB), Rural
Electrification Corporation (REC). The total debt of the power plant is of Rs
7,500 crore.
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BEWARE OF THE ANY DESK APP, WARNS RBI
If you get any pop-up to
download an app called ‘Any Desk’ to your mobile from Play store or App store,
beware. It could be a fraud to rob you off your financial information and then
funds. In an alert sent to banks, the Reserve Bank of India (RBI) has warned
that a new modus operandi to commit fraud on digital payment ecosystems has
been noticed and fraudulent transactions using Unified Payment Interface (UPI)
are increasing. Fraudsters would lure victims to download the ‘AnyDesk’ app
using some pretext. A nine-digit app code will be generated on user’s device
which the fraudster would ask the victim to share and this would will be
followed by request to grant permissions. Once done, victim’s mobile is
virtually in the hands of fraudster with the all key data. In no time, the
victim’s money is gone from a transaction from their own device! The modus
operandi can be used to carry out transactions through any mobile banking and
payment related app including UPO, wallets etc., RBI said while asking banks to
take steps to create customer awareness to minimise/eliminate frauds. The
mobile-based transactions on the UPI platform have been witnessing surge in
2018. As per National Payment Corporation of India data, the total value of
transactions during 2018 had gone up to ₹5.79 lakh crore as against
₹56,670 crore in 2017. The amount transacted through the UPI
platform witnessed a growth of more than 10 times, with the number of
transactions increasing eight times in 2018 over the previous year.
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REMOTE ACCESS APPS USED TO STEAL MONEY FROM BANK ACCOUNT
A new fraud has emerged
where the customer is led to install a third-party app which provides access to
the bank account. A Bengaluru-based former bank official lost Rs 1 lakh after
fraudsters gained access to his phone by getting him to download an app that allows
for malicious access. Narayan Hegde, a retired Syndicate Bank officer, was
swindled after he installed the AnyDesk app. Hegde was an e-wallet user and
needed help in restoring the app on his new phone. He called one of the numbers
that showed up after an online search for the mobile wallet’s helpline. The
party at the other end directed Hegde to download the AnyDesk app and asked him
to forward a hashed string text that he received. Soon after he did this, money
was withdrawn from his account in a series of debits. When he contacted his
bank’s branch, he was informed that the money was transferred to an Aditya
Birla Payments Bank account using the Unified Payments Interface (UPI)
platform. While five transactions were made to withdraw Rs 1.24 lakh, the fraudsters
were successful in debiting only Rs 1 lakh. However, Hegde received alerts for
just two of the five transactions. Banks shouldn’t make their clients run
around and should follow the RBI guidelines to pay up customers when they fall
prey to such frauds. Even former bank employees are not spared, said Prashant
Mali. He added that the finance ministry should follow up with banks’
management teams for compliance with the RBI guidelines to compensate victims
of such frauds. Incidentally, two days after this incident, the RBI cautioned
banks on the new modus operandi to commit fraud in digital payments. The
banking regulator said that fraudsters were luring victims to download the
AnyDesk app from the various app stores. Besides obtaining permissions from the
users, it would generate a nine-digit code which, if shared, provided the
fraudster with access to the victim’s mobile. The RBI noted that there are
other apps similar to AnyDesk that provide remote access to devices. According
to the RBI, this modus operandi can be used to carry out transactions through
any mobile banking and payment-related apps, including UPI and e-wallets.
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FACEBOOK BEHAVED LIKED 'DIGITAL GANGSTERS' BY FLOUTING PRIVACY
LAWS: UK MPS
A scathing British
parliamentary report on Monday branded Facebook digital gangsters that
knowingly violated data privacy and competition laws Lawmakers' 18-month
investigation into disinformation and fake news also accused Facebook of failing
to faithfully fight Russia's alleged attempts to influence elections. Cultural
select committee chair Damian Collins said Facebook deliberately sought to
frustrate our work by giving incomplete, disingenuous and at times misleading
answers to our questions. Facebook co-founder and chief Mark Zuckerberg turned
down three requests to appear before the committee. Companies like Facebook
should not be allowed to behave like 'digital gangsters' in the online world,
considering themselves to be ahead of and beyond the law, the report said. Social
media companies cannot hide behind the claim of being merely a 'platform' and
maintain that they have no responsibility themselves in regulating the content
of their sites. The committee urged a compulsory code of ethics for all tech
companies that would be overseen by an independent regulator. It said Facebook
should be obliged to take down sources of harmful content and disinformation. We
further recommend that the Government launches an independent investigation”
into past elections - including the UK election of 2017, the UK Referendum of
2016, and the Scottish Referendum of 2014 - to explore what actually happened
with regard to foreign influence, the report said.
#For Source of Information copy and paste the heading in google.
Thanks & Regards,
CS Meetesh Shiroya
Thanks & Regards,
CS Meetesh Shiroya
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